I am Chairman and CIO of Gramercy Capital Mgt. Corp., a NY registered investment advisor, which I founded in 1986. Gramercy has been ranked #1 in the Nelson's Directory of Registered Investment Advisors. I hold a B.A. in history from the University of Wisconsin, Madison and was awarded a Ford Foundation Fellowship. I earned an M.B.A. in financial accounting from the NYU Graduate School of Business and am also a CFA (Chartered Financial Analyst). I spent 15 years as a media and leisure analyst before I began managing OPM (other people's money) in 1980 at Manufacturers Hanover Trust where I oversaw their $250 million "mid-cap" fund. I have been the subject of feature stories in many publications such as The Wall Street Journal Business Week, Newsweek , and USA Today. I have appeared often as a guest on financial programs on CNBC, Bloomberg, PBS and Fox Business. I have been contributing to Forbes.com since 2006 so you can see my track record of commentary.

SiriusXM Surpasses $2 Without A Reverse Split

July 2011 is the three year anniversary for its promise to the FCC not to raise rates after the Sirius merger with XM was approved. That lid comes off in the third quarter and rest assured that rates will be going up. One hopes that the increases will not be so great as to push conversion rates even lower than they are now and also drive away existing customers.

Fourth Quarter 2011: Introduction of Sirius 2.0 receivers with many new features to compete with Pandora and other competition.

May 2012 is the date when the three year time restriction runs out for John Malone and his Liberty Group to acquire Sirius completely. The issue in this case has been that tax loss carry forwards evaporate if consolidated into a going concern within three years of purchase. Remember that from inception, Sirius has an accumulated deficit of $10,132,932,000. The portion of that which equates to tax loss carry forwards must be a very tempting prize for Mr. Malone who detests paying taxes. A year ago, Liberty’s Greg Maffei made remarks about Liberty selling off its interests in Sirius. That kind of talk hasn’t been heard lately.

Some other observations:

Now that losses are receding, we are nearing the point at which fewer shares outstanding will actually make sense. You’d have to earn $4.0 billion just to report a dollar per share of real earnings. But a reverse split soon would spread whatever GAAP earnings management can muster over a smaller share base. CEO Karmazin seems quite infatuated with the idea that his company is one of the most active traders on the NASDAQ each and every day. It has been a retail investor darling for years. That might stop with fewer shares.

Management made no mention during the call of the Howard Stern lawsuit against it filed during the quarter or in the press release. Considering how important Howard has been to their success, it seems odd that they chose to ignore it or pretend it isn’t out there.

The quarterly call consisted of 30 minutes of commentary by management and only 15 minutes of Q&A. That must be part of the cost savings program since it is rare that such calls at other companies are less than an hour.

With the stock back over $2 per share, there are many institutions that can buy it now and seem to be doing so with some gusto. The stock is up more than 30% this year.

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